SB-0517, As Passed Senate, November 30, 2004
SUBSTITUTE FOR
SENATE BILL NO. 517
A bill to amend 1984 PA 427, entitled
"Municipal employees retirement act of 1984,"
by amending sections 2a, 2b, and 36 (MCL 38.1502a, 38.1502b, and
38.1536), as amended by 1996 PA 220; and to repeal acts and parts
of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 2a. (1)
"Certification date" means the date certified
2 in the election
results filed with the secretary of state
3 pursuant to enacting
section 4 of the amendatory act that added
4 this sentence August 15,
1996.
5 (2) "Chief judge" means the chief judge of a judicial circuit
6 court, a judicial district court, or a judicial probate court as
7 provided in the revised
judicature act of 1961, Act No. 236 of
8 the Public Acts of
1961, being sections 600.101 to 600.9947 of
9 the Michigan
Compiled Laws 1961 PA 236, MCL
600.101 to
1 600.9948.
2 (3) "Governing body" means the representative legislative
3 body of a municipality, or the administrative board or commission
4 of a public corporation or instrumentality that does not have a
5 representative legislative body.
6 (4) "Judicial circuit court" means a judicial circuit of the
7 circuit court as provided in section 11 of article VI of the
8 state constitution of 1963.
9 (5) "Judicial district court" means a judicial district of
10 the district court as provided in section 8101 of the revised
11 judicature act of 1961, Act
No. 236 of the Public Acts of 1961,
12 being section 600.8101
of the Michigan Compiled Laws 1961
PA
13 236, MCL 600.8101.
14 (6) "Judicial probate court" means a county probate court or
15 probate court district as provided in section 15 of article VI of
16 the state constitution of 1963.
17 Sec. 2b. (1) "Member" means an individual who is included
18 in the membership of the retirement system, as determined by the
19 retirement board.
20 (2)
"Municipality" means a county, county road commission,
21 city, village,
township, or a combination of these units; a
22 lawful public
corporation or instrumentality established by 1 or
23 more counties, cities,
villages, townships, or a combination of
24 these units; or a public
corporation or instrumentality charged
25 by law with the
performance of a governmental function and whose
26 jurisdiction is
coextensive with 1 or more counties, cities,
27 villages, townships,
or a combination of these units. means
1 or
1 more of the following:
2 (a) A county, county road commission, city, village, or
3 township.
4 (b) A public corporation or instrumentality established by 1
5 or more counties, cities, villages, or townships.
6 (c) A public corporation or instrumentality charged by law
7 with the performance of a governmental function and whose
8 jurisdiction is coextensive with 1 or more counties, cities,
9 villages, or townships.
10 (d) A political subdivision located in this state or located
11 in this and another adjacent state of the United States,
12 including, but not limited to, the entities named in subdivision
13 (a), (b), or (c), or any combination of those units.
14 (e) A political subdivision located in this state and a
15 metropolitan government borough, or other political subdivision
16 of the province of Ontario, an agency of the United States, or a
17 similar entity of adjacent states of the United States and the
18 province of Ontario.
19 (f) A state university, community college, or junior college
20 whose employees are not public school employees who are members
21 under the public school employees retirement act of 1979, 1980 PA
22 300, MCL 38.1301 to 38.1408.
23 (g) Any municipal corporation as defined in section 1(a) of
24 1951 PA 35, MCL 124.1, or other governmental entity that is
25 eligible to join the retirement system and participate in any
26 program under this act, as determined by the retirement board.
27 Sec. 36. (1) A retirement board is created to administer
1 this act. Before the certification date, the retirement board
2 shall operate within the department of management and budget. On
3 and after the certification date, the retirement system shall
4 become a public corporation and shall no longer operate within
5 the executive branch of this state.
6 (2) On and after the certification date, the retirement board
7 has all of the following powers and duties:
8 (a) The retirement board shall determine and establish all of
9 the provisions of the retirement system affecting benefit
10 eligibility, benefit programs, contribution amounts, and the
11 election of municipalities, judicial circuit courts, judicial
12 district courts, and judicial probate courts to be governed by
13 the provisions of the retirement system. The retirement board
14 shall establish all retirement system provisions. As of 12:01
15 a.m. on the certification date, the retirement system provisions
16 shall not differ materially from the defined benefit provisions
17 that are in effect under this act at 11:59 p.m. on the day
18 immediately preceding
before the certification date. This
19 subdivision does not limit the retirement board's authority after
20 the certification date to establish additional programs including
21 but not limited to
defined benefit, and defined contribution,
22 ancillary benefits, health and welfare benefits, and other
23 postemployment benefit programs. The retirement board may adopt
24 the provisions of the
reciprocal retirement act, Act No. 88 of
25 the Public Acts of
1961, being sections 38.1101 to 38.1106 of the
26 Michigan Compiled Laws 1961
PA 88, MCL 38.1101 to 38.1106, on
27 behalf of the employees
of the retirement board. in the manner
1 prescribed in Act No.
88 of the Public Acts of 1961.
2 (b) The retirement board has the full and exclusive authority
3 and full responsibility to employ and pay for all professional
4 services including but not limited to actuarial, investment,
5 legal, accounting, and any other services that the retirement
6 board considers necessary for the proper operation of the
7 retirement system. The power granted to the retirement board in
8 this subdivision includes complete control of the procurement
9 process.
10 (c) The retirement
board shall appoint an a chief executive
11 director officer and any other employees for which the
12 retirement board establishes positions. The retirement board
13 shall establish the compensation of all persons appointed by the
14 board. Before the
certification date, the retirement board
15 shall offer all
employees of the retirement system a position
16 with the public
corporation for a guaranteed period of at least 1
17 year. An employee who
accepts a position with the newly formed
18 public corporation
shall become an employee of the public
19 corporation on the
certification date. On and after the
20 certification date, a person employed by the public corporation
21 is not an employee of this state for any purpose.
22 (d) The retirement board shall arrange for an annual
23 actuarial valuation and report of the actuarial soundness of each
24 participating municipality and court to be prepared by an
25 independent actuary based upon data compiled and supplied by
26 employees of the retirement system. The retirement board shall
27 adopt actuarial tables, assumptions, and formulas after
1 consultation with the actuary.
2 (e) The retirement board shall arrange for annual audits of
3 the records and accounts of the retirement system by a certified
4 public accountant or by a firm of certified public accountants
5 pursuant to generally accepted auditing standards and the uniform
6 budgeting and accounting
act, Act No. 2 of the Public Acts of
7 1968, being sections
141.421 to 141.440a of the Michigan Compiled
8 Laws 1968 PA 2, MCL 141.421 to 141.440a.
9 (f) The retirement board shall prepare an annual report for
10 each fiscal year in compliance with generally accepted accounting
11 principles. The report shall contain information regarding the
12 financial, actuarial, and other activities of the retirement
13 system during the fiscal year. The retirement board shall
14 furnish a copy of the annual
report to the governor , and a
15 copy in print or electronic format to each member house of the
16 legislature, each participating municipality, and each
17 participating court. The retirement board shall make the report
18 available to all members upon request. The report shall also
19 contain a review of the actuarial valuation required under
20 subdivision (d), if available.
21 (g) The retirement board shall appoint an attorney to be the
22 legal advisor of the board and to represent the board in all
23 proceedings.
24 (h) The retirement board shall appoint or employ custodians
25 of the assets of the retirement system. The custodians shall
26 perform all duties necessary and incidental to the custodial
27 responsibility and make disbursements of authorized retirement
1 system payments from the funds of the retirement system.
2 (i) The retirement board shall perform other functions that
3 are required for the execution of the provisions of this act.
4 (j) The retirement board shall establish the time and
5 location of the meetings of the retirement board and the time and
6 location of the annual meeting of the retirement system,
7 consistent with the
provisions of the open meetings act, Act
8 No. 267 of the Public
Acts of 1976, being sections 15.261 to
9 15.275 of the Michigan
Compiled Laws 1976 PA 267, MCL
15.261 to
10 15.275.
11 (3) Before the certification date, the provisions of the
12 executive organization
act of 1965, Act No. 380 of the Public
13 Acts of 1965, being
sections 16.101 to 16.608 of the Michigan
14 Compiled Laws 1965 PA 380, MCL 16.101 to 16.608, and the
15 management and budget
act, Act No. 431 of the Public Acts of
16 1984, being sections
18.1101 to 18.1594 of the Michigan Compiled
17 Laws 1984 PA 431, MCL 18.1101 to 18.1594, shall
govern the
18 administrative functions of the retirement system. However, any
19 provision of law in actual conflict with the provisions of the
20 amendatory act that added this sentence shall not apply.
21 (4) On and after the certification date, the retirement board
22 consists of the following 9 members, each of whom, excepting the
23 retiree member and the retirement board appointees, shall be from
24 a different county at the time of appointment:
25 (a) Two members appointed by the retirement board who have
26 knowledge or experience in retirement systems, administration of
27 retirement systems, or investment management or advisory
1 services.
2 (b) One member who is
a retiree of the system , nominated
3 appointed by the board.
and elected by the delegates to an
4 annual meeting of the
retirement system.
5 (c) Three members of the retirement system who are officers
6 of participating
municipalities or of participating courts, who
7 shall be designated as officer board members.
8 (d) Three employee members of the retirement system who are
9 not officers of a
participating municipality or of a
10 participating court, who shall be designated as employee board
11 members.
12 (5) On the
certification date, all officer and employee
13 board members shall
continue as board members until their term of
14 office expires. The
state treasurer shall no longer be a board
15 member on and after
the certification date. The initial terms of
16 the 3 newly
established board positions will be set by the
17 retirement board to
coincide with the terms of the existing
18 elected board members.
Following expiration of the term of
19 office of the existing
elected board members, subsections (7)
20 through (10) shall
govern.
21 (5) (6) The
retirement board shall adopt its own rules of
22 procedure and shall keep a record of its proceedings. Five
23 members of the retirement board shall constitute a quorum at any
24 meeting of the retirement board and at least 5 concurring votes
25 shall be necessary for any decision by the retirement board.
26 Each member of the retirement board shall be entitled to 1 vote
27 on each question before the retirement board.
1 (6) (7) The
regular term of office of members of the
2 retirement board is 3 years. Each member of the retirement board
3 shall take an oath of office before assuming the duties of the
4 position. The oath
of office shall be filed with the secretary
5 of state. Members of the retirement board shall serve without
6 compensation with respect to their duties, but shall be
7 reimbursed by the retirement system for their actual and
8 necessary expenses incurred in the performance of their duties.
9 A participating
municipality or participating court employing a
10 member of the retirement board shall treat absences from work on
11 account of retirement board business in such a manner that the
12 individual does not suffer loss of pay or benefits.
13 (7) (8) A
vacancy shall occur on the retirement board upon
14 the occurrence of any of the following events:
15 (a) An officer board member ceases to be eligible for
16 nomination as an officer board member.
17 (b) An employee board member ceases to be eligible for
18 nomination as an employee board member.
19 (c) Failure to attend 3 consecutive scheduled meetings of the
20 retirement board, unless excused for cause by majority vote of
21 the board members attending the meeting.
22 (8) (9) A
vacancy occurring on the retirement board at
23 least 120 days before the expiration of a term of office shall be
24 filled by the retirement board. Board appointments under this
25 subsection shall be for the period ending on the December 31 next
26 following the date of the vacancy. For the officer board members
27 and employee board members, a replacement for any further portion
1 of the unexpired term shall be filled pursuant to section 45.
2 For the 2 appointed board members and the retiree board member, a
3 replacement for any further portion of the unexpired term shall
4 be filled pursuant to subsection (4).
5 (9) (10) The
retirement board shall select from its members
6 a chairperson and a chairperson pro-tem.
7 (10) (11) The
retirement board shall employ an a chief
8 executive director officer.
The chief executive director
9 officer shall do all of the following:
10 (a) Manage and administer the retirement system under the
11 supervision and direction of the retirement board.
12 (b) Invest the assets of the retirement system, as directed
13 by the retirement board,
consistent with Act No. 314 of the
14 Public Acts of 1965,
being sections 38.1132 to 38.1140i of the
15 Michigan Compiled Laws
the public employee retirement
system
16 investment act, 1965 PA 314, MCL 38.1132 to 38.1140m, which act
17 governs the investment of assets of public employee retirement
18 systems.
19 (c) Annually prepare and submit to the retirement board for
20 review, amendment, and adoption an itemized budget showing the
21 amount required to pay the retirement system's expenses for the
22 following fiscal year.
23 (d) Perform other duties as the retirement board, in its
24 discretion, shall
delegate to the chief executive director
25 officer.
26 Enacting section 1. Section 36a of the municipal employees
27 retirement act of 1984, 1984 PA 427, MCL 38.1536a, is repealed.